SMALL BUSINESS SUCCESS
Next Generation of Small Business Owners Increasingly More Diverse
As we head towards the third decade of this millennium, small business owners are increasingly reflecting the diversity found in the larger society. The most dramatic change exists between business owners of the current generation and those in the process of starting a business of their own. While white males still make up the majority of small business owners, there is a greater representation of women, African Americans, Hispanics, Asians, naturalized citizens from other countries, and younger people than at any other time in history.
The Rise of Women as Small Business Owners
The most dramatic change in business ownership and leadership appears to be based on gender. According to a survey conducted by American Express, the increase in women-owned business is a whopping 3,000 percent since the early 1970s when it became commonplace to find women in the workforce. American Express also reports that women start more than 1,800 businesses per day across the country.
Part of the reason for the huge increase is due to the desire for entrepreneurship but the economic recession of the late 2000s plays an equal role. Women who lost their jobs, particularly those over age 40 and women of color, had difficulty finding new ones. This forced them into the role of small business owner just to make ends meet.
Although the employment situation has improved significantly in the last decade, women still deal with a significant wage gap compared to the salaries earned by their male peers. This has been another reason behind the surge in women starting their own businesses. Women from ethnic minorities have started new businesses at a rate three times higher than all women combined.
Diverse Business Owners Hire Diverse Employees
People who view themselves as a minority business owner tend to look for greater diversity when hiring their first employees. This has many positive effects for an organization and its customers. Employees from a wide variety of ethnic backgrounds and age groups, as well as those with varied skills and experiences, will better understand the needs of a diverse customer base. With competitors just a click away, customer loyalty can no longer be assumed. Companies that make an effort to understand the unique needs of customers and their entire journey will gain more loyalty than those with a more stagnant workforce.
Small business diversity can help any company thrive. Change cannot happen when everyone thinks the same way and has very similar backgrounds. Bringing different perspectives to the table allows for innovative thinking that can help a small business quickly stand out from its competition and become an industry leader. While small business owners shouldn’t recruit based on race, gender, or age alone, its worth considering a wide range of candidates for every open position. A diverse workforce will reflect the values of the owner and send a positive message to the community at the same time.
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